8-i

CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

TABLE OF CONTENTS

8.1 INTRODUCTION ........................................................................................................... 8-1

8.1.1 General Approach for Life-Cycle Cost and Payback Period Analysis............................ 8-1

8.1.2 Overview of Life-Cycle Cost and Payback Period Analysis Inputs................................ 8-2

8.1.3 Use of Residential Energy Consumption Survey and Commercial Building 

Energy Consumption Survey in Life-Cycle Cost and Payback Period Analysis............. 8-6

8.2 LIFE-CYCLE COST ANALYSIS INPUTS.................................................................... 8-6

8.2.1 Total Installed Cost Inputs............................................................................................... 8-7

8.2.1.1 Manufacturer Costs........................................................................................ 8-7

8.2.1.2 Markups ......................................................................................................... 8-9

8.2.1.3 Total Consumer Price .................................................................................. 8-10

8.2.1.4 Future Product Prices................................................................................... 8-11

8.2.1.5 Installation Cost ........................................................................................... 8-13

8.2.1.6 Total Installed Cost...................................................................................... 8-14

8.2.2 Operating Cost Inputs.................................................................................................... 8-15

8.2.2.1 Annual Energy Use Savings ........................................................................ 8-15

8.2.2.2 Energy Prices............................................................................................... 8-15

8.2.2.3 Energy Price Trends..................................................................................... 8-22

8.2.2.4 Repair Cost................................................................................................... 8-23

8.2.2.5 Maintenance Cost......................................................................................... 8-25

8.2.2.6 Lifetime........................................................................................................ 8-26

8.2.2.7 Discount Rates............................................................................................. 8-27

8.2.2.8 Compliance Date of Standard ...................................................................... 8-35

8.2.2.9 Base Case Distribution of Efficiency Levels............................................... 8-35

8.3 PAYBACK PERIOD INPUTS...................................................................................... 8-36

8.4 LCC AND PBP RESULTS............................................................................................ 8-37

8.4.1 Gas-Fired Hot Water Boilers......................................................................................... 8-38

8.4.2 Gas-Fired Steam Boilers................................................................................................ 8-41

8.4.3 Oil-Fired Hot Water Boilers .......................................................................................... 8-44

8.4.4 Oil-Fired Steam Boilers................................................................................................. 8-47

8.4.5 Standby Power Results .................................................................................................. 8-50

8.4.5.1 Gas-Fired Hot Water Boilers....................................................................... 8-50

8.4.5.2 Gas-Fired Steam Boilers.............................................................................. 8-53

8.4.5.3 Oil-Fired Hot Water Boilers ........................................................................ 8-56

8.4.5.4 Oil-Fired Steam Boilers............................................................................... 8-59

8.4.5.5 Electric Hot Water Boilers........................................................................... 8-62

8.4.5.6 Electric Steam Boilers.................................................................................. 8-65

LIST OF TABLES

Table 8.1.1 Summary of Inputs and Key Assumptions Used in the LCC and PBP 

Analysis................................................................................................................ 8-5
8-ii

Table 8.2.1 Manufacturer Production Cost for Residential Boilers by Efficiency Level....... 8-8

Table 8.2.2 Summary of National Average Markups on Residential Boilers......................... 8-9

Table 8.2.3 Overall Markup for Residential Boilers by Product Class................................. 8-10

Table 8.2.4 Average Consumer Price for Residential Boilers (2013$) ................................ 8-11

Table 8.2.5 Average Total Installed Cost for Residential Boilers (2013$)........................... 8-14

Table 8.2.6 Average Residential Electricity Prices in 2011 ................................................. 8-16

Table 8.2.7 Average Commercial Electricity Prices in 2011................................................ 8-17

Table 8.2.8 Average Residential Natural Gas Prices in 2011............................................... 8-18

Table 8.2.9 Average Commercial Natural Gas Prices in 2011 ............................................. 8-19

Table 8.2.10 Average Residential LPG Prices in 2011........................................................... 8-19

Table 8.2.11 Average Commercial LPG Prices in 2011......................................................... 8-20

Table 8.2.12 Average Residential Fuel Oil Prices in 2011..................................................... 8-21

Table 8.2.13 Average Commercial Fuel Oil Prices in 2011 ................................................... 8-22

Table 8.2.14 Annualized Repair Cost for Residential Boilers (2013$) .................................. 8-25

Table 8.2.15 Annualized Maintenance Cost for Residential Boilers (2013$) ........................ 8-26

Table 8.2.16 Lifetime Parameters for Residential Boilers...................................................... 8-27

Table 8.2.17 Types of Household Debt and Equity by Percentage Shares (%)...................... 8-28

Table 8.2.18 Average Nominal Interest Rates for Household Debt ....................................... 8-29

Table 8.2.19 Average Real Effective Interest Rates for Household Debt .............................. 8-29

Table 8.2.20 Average Nominal and Real Interest Rates for Household Equity ..................... 8-30

Table 8.2.21 Average Shares and Rates for Household Debt and Equity .............................. 8-31

Table 8.2.22 Data Used to Calculate Real Effective Mortgage Rates.................................... 8-32

Table 8.2.23 Risk free rate and equity risk premium, 2010-2012 .......................................... 8-34

Table 8.2.24 Weighted Average Cost of Capital for Sectors that Purchase Residential 

Boilers................................................................................................................ 8-35

Table 8.2.25 Base Case Market Shares in (2020) by Efficiency Level for Boilers................ 8-36

Table 8.4.1 Gas-Fired Hot Water Boilers: LCC and PBP Results........................................ 8-38

Table 8.4.2 Rebuttable Payback Period for Gas-Fired Hot Water Boilers........................... 8-40

Table 8.4.3 Gas-Fired Steam Boilers: LCC and PBP Results .............................................. 8-41

Table 8.4.4 Rebuttable Payback Period for Gas-Fired Steam Boilers.................................. 8-43

Table 8.4.5 Oil-Fired Hot Water Boilers: LCC and PBP Results......................................... 8-44

Table 8.4.6 Rebuttable Payback Period for Oil-Fired Hot Water Boilers ............................ 8-46

Table 8.4.7 Oil-Fired Steam Boilers: LCC and PBP Results................................................ 8-47

Table 8.4.8 Rebuttable Payback Period for Oil-Fired Steam Boilers................................... 8-49

Table 8.4.9 Gas-Fired Hot Water Boilers: Standby Power LCC and PBP Results.............. 8-50

Table 8.4.10 Rebuttable Payback Period for Gas-Fired Hot Water Boilers (Standby) .......... 8-52

Table 8.4.11 Gas-Fired Hot Water Boilers: Standby Power LCC and PBP Results.............. 8-53

Table 8.4.12 Rebuttable Payback Period for Gas-Fired Steam Boilers (Standby) ................. 8-55

Table 8.4.13 Oil-Fired Hot Water Boilers: Standby LCC and PBP Results........................... 8-56

Table 8.4.14 Rebuttable Payback Period for Oil-Fired Hot Water Boilers (Standby)............ 8-58

Table 8.4.15 Oil-Fired Steam Boilers: LCC and PBP Results................................................ 8-59

Table 8.4.16 Rebuttable Payback Period for Oil-Fired Hot Water Boilers (Standby)............ 8-61

Table 8.4.17 Electric Hot Water Boilers: Standby LCC and PBP Results............................. 8-62

Table 8.4.18 Rebuttable Payback Period for Electric Hot Water Boilers (Standby).............. 8-64

Table 8.4.19 Electric Steam Boilers: Standby LCC and PBP Results.................................... 8-65
8-iii

Table 8.4.20 Rebuttable Payback Period for Electric Steam Boilers (Standby)..................... 8-67

LIST OF FIGURES

Figure 8.1.1 Flow Diagram of Inputs for the Determination of LCC and PBP ....................... 8-4

Figure 8.2.1 Historical Nominal and Deflated Producer Price Indexes for Heating 

Equipment Manufacturing ................................................................................. 8-12

Figure 8.2.2 Projected Residential Energy Prices................................................................. 8-23

Figure 8.2.3 Projected Commercial Energy Prices ............................................................... 8-23

Figure 8.4.1 Distribution of LCC Savings for Gas-Fired Hot Water Boilers ........................ 8-39

Figure 8.4.2 Distributions of PBP for Gas-Fired Hot Water Boilers..................................... 8-40

Figure 8.4.3 Distribution of LCC Savings for Gas-Fired Steam Boilers............................... 8-42

Figure 8.4.4 Distributions of PBP for Gas-Fired Steam Boilers............................................ 8-43

Figure 8.4.5 Distribution of LCC Savings for Oil-Fired Hot Water Boilers.......................... 8-45

Figure 8.4.6 Distributions of PBP for Oil-Fired Hot Water Boilers ...................................... 8-46

Figure 8.4.7 Distribution of LCC Savings for Oil-Fired Steam Boilers ................................ 8-48

Figure 8.4.8 Distributions of PBP for Oil-Fired Steam Boilers............................................. 8-49

Figure 8.4.9 Distribution of LCC Savings for Gas-Fired Hot Water Boilers (Standby)........ 8-51

Figure 8.4.10 Distributions of PBP for Gas-Fired Hot Water Boilers (Standby) .................... 8-52

Figure 8.4.11 Distribution of LCC Savings for Gas-Fired Steam Boilers (Standby) .............. 8-54

Figure 8.4.12 Distributions of PBP for Gas-Fired Steam Boilers (Standby) ........................... 8-55

Figure 8.4.13 Distribution of LCC Savings for Oil-Fired Hot Water Boilers (Standby)......... 8-57

Figure 8.4.14 Distributions of PBP for Oil-Fired Hot Water Boilers (Standby)...................... 8-58

Figure 8.4.15 Distribution of LCC Savings for Oil-Fired Steam Boilers (Standby)................ 8-60

Figure 8.4.16 Distributions of PBP for Oil-Fired Steam Boilers (Standby) ............................ 8-61

Figure 8.4.17 Distribution of LCC Savings for Electric Hot Water Boilers (Standby) ........... 8-63

Figure 8.4.18 Distributions of PBP for Electric Hot Water Boilers (Standby)........................ 8-64

Figure 8.4.19 Distribution of LCC Savings for Electric Steam Boilers (Standby).................. 8-66

Figure 8.4.20 Distributions of PBP for Electric Steam Boilers (Standby)............................... 8-67
8-1

CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

8.1 INTRODUCTION

The effect of amended standards on individual customers usually includes a reduction in 

operating cost and an increase in purchase cost. This chapter describes two metrics used in the 

analysis to determine the economic impact of standards on individual residential consumers.

• Life-cycle cost (LCC) is the total customer cost over the life of an appliance or product, 

including purchase costs and operating costs (which in turn include maintenance, repair, 

and energy costs). Future operating costs are discounted to the time of purchase and 

summed over the lifetime of the appliance or product.

• Payback period (PBP) measures the amount of time it takes customers to recover the 

assumed higher purchase price of more energy-efficient products through reduced 

operating costs.

The U.S. Department of Energy (DOE) conducted the LCC and PBP analysis using a 

spreadsheet model developed in Microsoft Excel. When combined with Crystal Ball (a 

commercially available software program), the LCC and PBP model generates a Monte Carlo 

simulation to perform the analysis by incorporating uncertainty and variability considerations in 

certain of the key parameters as discussed further in section 8.1.1.

Inputs to the LCC and PBP analysis of residential boiler products are discussed in 

sections 8.2 and Table 8.2.23, respectively. Results for each metric are presented in section 8.4. 

Key variables and calculations are presented for each metric. The calculations discussed here 

were performed with a series of Microsoft Excelspreadsheets that are accessible over the Internet 

(http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=62).

Details of the spreadsheets and instructions for using them are discussed in appendix 8-A.

8.1.1 General Approach for Life-Cycle Cost and Payback Period Analysis

In recognition of the fact that each residential building using boilers is unique, variability 

and uncertainty are analyzed by performing the LCC and PBP calculations detailed here for a 

representative sample of individual households and commercial buildings. The results are 

expressed as the number of buildings experiencing economic impacts of different magnitudes. 

The LCC and PBP model was developed using Microsoft Excel spreadsheets combined with 

Crystal Ball. The LCC and PBP analysis explicitly model both the uncertainty and the variability 

in the model’s inputs using Monte Carlo simulation and probability distributions (see appendix 

8-B).

The LCC analysis used the estimated energy use for each residential boiler unit as 

described in the energy use analysis in chapter 7. Energy use of residential boilers is sensitive to 

climate and therefore varies by location within the United States. Aside from energy use, other 
8-2

important factors influencing the LCC and PBP analysis include energy prices, installation costs, 

product distribution markups, and sales taxes.

A certain fraction of residential boilers is used for commercial applications. This fraction 

determines the frequency at which the model’s sampling process will select an item from the 

commercial category.

As mentioned previously, DOE generated LCC and PBP results as probability 

distributions using a simulation based on Monte Carlo analysis methods, in which certain key 

inputs to the analysis consist of probability distributions rather than single-point values.

Therefore, the outcomes of the Monte Carlo analysis can also be expressed as probability 

distributions. As a result, the Monte Carlo analysis produces a range of LCC and PBP results. A 

distinct advantage of this type of approach is that DOE can identify the percentage of customers 

achieving LCC savings or attaining certain PBP values due to an increased efficiency level, in 

addition to the average LCC savings or average PBP for that efficiency level.

The LCC and PBP results are displayed as distributions of impacts compared to a base

case. The base case efficiency is for 2020 and reflects the expected distribution of efficiency 

levels by product class. 

8.1.2 Overview of Life-Cycle Cost and Payback Period Analysis Inputs

The LCC is the total customer cost over the life of the product, including purchase price 

(including retail markups, sales taxes, and installation costs) and operating cost (including repair 

costs, maintenance costs, and energy cost). Future operating costs are discounted to the time of 

purchase and summed over the lifetime of the product. The PBP is the increase in purchase cost 

of a higher efficiency product divided by the change in annual operating cost of the product. It 

represents the number of years that it will take the customer to recover the increased purchase 

cost through decreased operating costs. In the PBP calculation, future costs are not discounted.

Inputs to the LCC and PBP analysis are categorized as: (1) inputs for establishing the 

purchase cost, otherwise known as the total installed cost; and (2) inputs for calculating the 

operating cost (i.e., energy, maintenance, and repair costs).

The primary inputs for establishing the total installed cost are:

• Baseline manufacturer selling price: The baseline manufacturer selling price (MSP) is 

the price charged by the manufacturer to a wholesaler for product meeting existing 

minimum efficiency (or baseline) standards. The MSP includes a markup that converts 

the cost of production (i.e., the manufacturer cost) to a MSP.

• Standard-level manufacturer selling price increase: The standard-level MSP is the 

incremental change in MSP associated with producing product at each of the higher 

efficiency standard levels. 
8-3

• Markups and sales tax: Markups and sales tax are the wholesaler and contractor margins 

and state and local retail sales taxes associated with converting the MSP to a customer 

price. 

• Installation cost: Installation cost is the cost to the customer of installing the product. 

The installation cost represents all costs required to install the product but does not 

include the marked-up customer product price. The installation cost includes labor, 

overhead, and any miscellaneous materials and parts. 

The primary inputs for calculating the operating cost are:

• Product energy consumption: The product energy consumption is the site energy use 

associated with the use of the boiler to provide space conditioning to the building.

• Energy Prices: Electricity, natural gas, liquid petroleum gas (LPG), and fuel oil prices are 

determined using average monthly energy prices.

• Electricity, natural gas, and fuel oil price trends: The Energy Information 

Administration’s (EIA’s) Annual Energy Outlook 2013 (AEO 2013) 1 is used to forecast 

energy prices into the future. For the results presented in this chapter, DOE used the AEO 

2013 Reference case to forecast future energy prices.

• Maintenance costs: The labor and material costs associated with maintaining the 

operation of the equipment.

• Repair costs: The labor and material costs associated with repairing or replacing 

components that have failed.

• Lifetime: The age at which the boiler is retired from service.

• Discount rate: The rate at which future costs and savings are discounted to establish their 

present value.

Figure 8.1.1 graphically depicts the relationships between the installed cost and operating 

cost inputs for the calculation of the LCC and PBP. 
8-4

Figure 8.1.1 Flow Diagram of Inputs for the Determination of 

LCC and PBP

Table 8.1.1 provides descriptions of the various inputs to the calculation of the LCC and 

PBP. As noted earlier, most of the inputs are characterized by probability distributions that 

capture variability in the input variables. 

Manufacturer Sales 

Price Standard i= 1...n

Manufacturer Sales 

Price Standard i= 1...n

Installation Costs Installation Costs

Repair Costs Repair Costs Lifetimes Lifetimes

Annual Maintenance

Electricity 

Consumption Electricity 

Consumption

Manufacturer Base 

Price

Total Installed Cost 

(Std i –Base)

Manufacturer Base 

Price

Contractor Markups

Wholesaler/ 

Distributor Markup

Electricity Prices

Equipment Prices

Sales Tax

Manufacturer Selling 

Price (Base)

Installation Costs

Manufacturer Selling 

Price Standard i= 1...n

Electricity 

Consumption Annual Energy Costs

Annual Maintenance

Repair Costs

Annual Operating 

Cost (Std i - Base)

Payback 

Period

Discount Rate

Lifetimes

Lifetime 

Operating 

Cost (Std 

i – Base)

Lifecycle 

Cost

Annual Maintenance 

Costs

Manufacturer Sales 

Price Standard i= 1...n

Manufacturer Sales 

Price Standard i= 1...n

Installation Costs Installation Costs

Repair Costs Repair Costs Lifetimes Lifetimes

Annual Maintenance

Electricity 

Consumption Electricity 

Consumption

Manufacturer Base 

Price

Total Installed Cost 

(Std i –Base)

Manufacturer Base 

Price

Contractor Markups

Wholesaler/ 

Distributor Markup

Electricity Prices

Equipment Prices

Sales Tax

Manufacturer Selling 

Price (Base)

Installation Costs

Manufacturer Selling 

Price Standard i= 1...n

Electricity 

Consumption Annual Energy Costs

Annual Maintenance

Repair Costs

Annual Operating 

Cost (Std i - Base)

Payback 

Period

Discount Rate

Lifetimes

Lifetime 

Operating 

Cost (Std 

i – Base)

Lifecycle 

Cost

Annual Maintenance 

Costs
8-5

Table 8.1.1 Summary of 

Inputs and 

Key 

Assumptions 

Used in the 

LCC and 

PBP 

Analysis

Inputs Description

Affecting Installed Costs

Product Price

Derived MSP for boiler units at different heating and air conditioning input 

capacities (from the engineering analysis) and multiplied by wholesaler 

markups and contractor markups plus sales tax (from markups analysis). Used 

the probability distribution for the different markups to describe their 

variability. 

Installation Cost

Includes installation labor derived from RS Means Residential Cost Data 2013.

2

Overhead and materials costs and profits are assumed to be included in the 

contractor’s markup. Thus, the total installed cost equals the consumer product 

price (manufacturer cost multiplied by the various markups plus sales tax) plus 

the installation cost. 

Affecting Operating Costs

Annual Energy Use See chapter 7. 

Energy Efficiency

The Annual Fuel Utilization Efficiency (AFUE) is the efficiency descriptor for 

residential boilers. Residential boiler test procedure calculation methodologies

are used to determine the annual energy consumption associated with the 

considered standard levels.

Energy Prices

Costs were calculated for RECS 2009 households from monthly marginal 

average electricity and natural gas, LPG, or fuel oil prices in each of 30 states 

and groups of states in RECS 2009.a Residential prices were escalated by the 

AEO 2013 forecasts to estimate future electricity prices. Escalation was 

performed at the census division level and aggregated to the regions used in the 

study. Costs were calculated for CBECS 2003 buildings from monthly marginal 

average electricity and natural gas, LPG, or fuel oil prices in each of 9 divisions 

in CBECS 2003. Commercial prices were escalated by the AEO 2013 forecasts 

to estimate future electricity prices. Escalation was performed at the census 

division level.

Maintenance Cost

The cost associated with maintaining the operation of the product (e.g., 

checking blower). Annual maintenance cost does not change as a function of 

MSP.

Repair Cost

Estimated the annualized repair cost for baseline efficiency boiler product, 

based on costs of major repair (such as motor replacement), from a variety of 

published sources. It is assumed that repair costs would vary for higher 

efficiency levels.

 a RECS 2009 provides 27 regions (also called reportable domains). The 27th region originally includes Oregon, 

Washington, Alaska, and Hawaii. Alaska and Hawaii are subdivided into separate regions (28 and 29, respectively), 

based on cooling and heating degree days. In addition, region 14 originally included West Virginia, which has been 

disaggregated into region 30 based on cooling and heating degree days. See Appendix 7-A for more details.
8-6

Affecting Present Value of Annual Operating Cost Savings

Product Lifetime Used the probability distribution of lifetimes developed for boilers. 

Discount Rate

Mean real discount rates ranging from 0 percent to 10.7 percent for various 

classes of residential customers based on Federal Reserve Board’s Survey of 

Consumer Finances. Probability distributions are used for the discount rates.

Mean real discount rates ranging from 0 percent to 10.9 percent for various 

classes of commercial customers based on Federal Reserve Board’s Federal 

Reserve Statistical Releases – Selected Interest Rates.

b Probability distributions 

are used for the discount rates.

Date Standard 

Becomes Effective 2020 (5 years after expected publication of the final rule)

All of the inputs depicted in Figure 8.1.1 and summarized in Table 8.1.1 are discussed in 

sections 8.2 and Table 8.2.23.

8.1.3 Use of Residential Energy Consumption Survey and Commercial Building Energy 

Consumption Survey in Life-Cycle Cost and Payback Period Analysis

The LCC and PBP calculations detailed here are for a representative sample of individual 

boiler users. The residential boilers are assumed to be installed both in residential and 

commercial buildings.

As explained in chapter 7, the Energy Information Administration (EIA)’s 2009 

Residential Energy Consumption Survey (RECS 2009)

3 serves as the basis for determining the 

representative residential sample, while EIA’s 2003 Commercial Building Energy Consumption 

Survey (CBECS 2003).4 RECS collects energy-related data for occupied primary housing units 

in the United States. RECS 2009 included data from 12,083 housing units that represent almost 

113.6 million households. CBECS collects energy-related data for commercial buildings in the 

United States. CBECS 2003 included data from 5,215 buildings representing 4.9 million 

buildings. 

Appendix 7-A presents the variables used and their definitions, as well as further 

information about the derivation of the household and building samples.

8.2 LIFE-CYCLE COST ANALYSIS INPUTS

Life-cycle cost is the total customer cost over the life of a product, including purchase 

cost and operating costs (which are composed of energy costs, maintenance costs, and repair 

costs). Future operating costs are discounted to the time of purchase and summed over the 

lifetime of the product. Life-cycle cost is defined by the following equation:

 b The Federal Reserve Statistical Release reference includes historical data sets for state and local bonds, CDs, and 

corporate bonds. 

∑=

= + +

N

t

t

t LCC IC OC r

1

/(1 )
8-7

Eq. 8.1

Where:

LCC = life-cycle cost ($),

IC = total installed cost ($),

∑ = sum over the lifetime, from year 1 to year N, 

where N = lifetime of product (years),

OC = operating cost ($),

r = discount rate, and

t = year for which operating cost is being determined.

DOE expresses all the costs in 2013$. Total installed cost, operating cost, lifetime, and 

discount rate are discussed in the following sections. In the LCC analysis, the year of product 

purchase is assumed to be 2020, the assumed effective date of energy conservation standards for 

residential boilers.

8.2.1 Total Installed Cost Inputs

The total installed cost to the consumer is defined by the following equation:

Eq. 8.2

Where:

EQP = product price ($) (i.e., customer price for the product only), and

INST = installation cost ($) (i.e., the cost for labor and materials).

The product price is based on the distribution channel through which the customer 

purchases the product. As discussed in chapter 6, DOE defined one major distribution channel 

for new units to describe how the product passes from the manufacturer to the customer: the 

manufacturer sells the product to a wholesaler or distributor, who sells to a mechanical 

contractor hired by a general contractor. The general contractor purchases and installs the 

product on behalf of the customer and adds its markup to the mechanical contractor’s price. 

Replacement products follow the same distribution channel, except that there is no general 

contractor. Instead, the mechanical contractor takes on the general contractor’s function.

The remainder of this section provides information about the variables DOE used to 

calculate the total installed cost for residential boiler products.

8.2.1.1 Manufacturer Costs

DOE developed the manufacturer costs for boilers as described in chapter 5, Engineering 

Analysis. The manufacturer costs at each efficiency level are shown in Table 8.2.1.

IC = EQP + INST
8-8

Table 8.2.1 Manufacture

r Production 

Cost for 

Residential 

Boilers by 

Efficiency 

Level 

Product Class Efficiency Level

Manufacturer 

Production 

Cost

Incremental 

Cost

2013$ 2013$

Gas-Fired Hot Water Boiler

82% AFUE - Baseline $643.68 -

83% AFUE - Increased HX Area $651.07 $7.39 

84% AFUE - Increased HX Area $659.34 $15.66 

85% AFUE - Increased HX Area $729.10 $85.42 

90% AFUE - Condensing 

Baseline $1,019.07 $375.39 

92% AFUE - Increased HX Area $1,161.93 $518.25 

96% AFUE - Max Tech $1,466.43 $822.75 

Gas-Fired Steam Boiler

80% AFUE - Baseline $753.97 -

82% AFUE - Increased HX Area $769.56 $15.59 

83% AFUE - Max Tech $818.17 $64.20 

Oil-Fired Hot Water Boiler

84% AFUE - Baseline $1,242.73 -

85% AFUE - Increased HX Area $1,312.74 $70.01 

86% AFUE - Increased HX Area $1,422.74 $180.01 

91% AFUE - Condensing (Max 

Tech) $2,033.91 $791.18 

Oil-Fired Steam Boiler

82% AFUE - Baseline $1,266.71 -

84% AFUE - Increased HX Area $1,406.72 $140.01 

85% AFUE - Increased HX Area $1,457.60 $190.89 

86% AFUE - Max Tech $1,548.64 $281.93 

In order to capture variations in manufacturer production costs, DOE derived 

manufactured cost adders for different boiler input capacities. 
8-9

8.2.1.2 Markups

For a given distribution channel, the overall markup is the value determined by 

multiplying all the associated markups and the applicable sales tax together to arrive at a single 

overall distribution chain markup value. The overall markup is multiplied times the baseline or 

standard-compliant manufacturer cost to arrive at the price paid by the customer. Because there 

are baseline and incremental markups associated with the wholesaler and mechanical contractor, 

the overall markup is also divided into a baseline markup (i.e., a markup used to convert the 

baseline manufacturer price into a customer price) and an incremental markup (i.e., a markup 

used to convert a standard-compliant manufacturer cost increase due to an efficiency increase 

into an incremental customer price). Markups can differ depending on whether the product is 

being purchased for a new construction installation or is being purchased to replace an existing 

product. DOE developed the overall baseline markups and incremental markups for both new 

construction and replacement applications as a part of the markups analysis (chapter 6).

Based on the percentages of the market attributed to each distribution channel, Table 

8.2.2 and Table 8.2.3 display the weighted-average overall markups and their associated 

components for the baseline and incremental markups, respectively.

Table 8.2.2 Summary of 

National 

Average 

Markups on 

Residential 

Boilers

 Replacement New Construction

Baseline 

Markup

Incremental 

Markup

National 

Account:

Baseline/ 

Incr. 

Markup

Baseline 

Markup

Incremental 

Markup

National 

Account:

Baseline/ 

Incr. 

Markup

Manufacturer 1.41 1.41

Wholesaler 1.36 1.10 1.36/1.10 1.36 1.10 1.36/1.10

Mechanical 

Contractor

1.53 1.22 -- 1.45 1.15 --

General 

Contractor

-- -- -- 1.31 1.19 --

Sales Tax 1.06 1.06 1.06 -- -- 1.06

Overall 

Markup

3.12 2.01 2.04/1.64 3.64 2.12 2.04/1.64

Because the relative importance of new construction and replacements in total shipments 

varies among the product classes, the total markup varies as well (Table 8.2.3).
8-10

Table 8.2.3 Overall 

Markup for 

Residential 

Boilers by 

Product 

Class 

Product Class Baseline Markup Incremental Markup

Gas-Fired Hot Water Boiler 3.11 1.97

Gas-Fired Steam Boiler 3.06 1.97

Oil-Fired Hot Water Boiler 3.23 2.11

Oil-Fired Steam Boiler 3.00 1.96

Electric Hot Water Boiler 3.05 2.01

Electric Steam Boiler 3.05 2.01

8.2.1.3 Total Consumer Price

DOE derived the consumer product price for the baseline product by taking the product 

of the baseline manufacturer cost and the baseline overall markup (including the sales tax). For 

each efficiency level above the baseline, DOE derived the consumer product price by taking 

baseline product consumer price and adding to it the product of the incremental manufacturer 

cost and the incremental overall markup (including the sales tax). Markups and the sales tax all 

can take on a variety of values, depending on location, so the resulting total installed cost for a 

particular efficiency level is represented by a distribution of values.

Table 8.2.4presents the average consumer product price for each boiler product class at 

each efficiency level examined.
8-11

Table 8.2.4 Average 

Consumer 

Price for

Residential 

Boilers

(2013$)

Product Class Efficiency Level

Average 

Consumer 

Price 

Incremental 

Cost

2013$ 2013$

Gas-Fired Hot Water 

Boiler

82% AFUE - Baseline $2,039.64 -

83% AFUE - Increased HX Area $2,054.78 $15.14 

84% AFUE - Increased HX Area $2,071.72 $32.08 

85% AFUE - Increased HX Area $2,214.65 $175.01 

90% AFUE - Condensing Baseline $2,808.74 $769.11 

92% AFUE - Increased HX Area $3,101.44 $1,061.80 

96% AFUE - Max Tech $3,725.31 $1,685.67 

Gas-Fired Steam Boiler

80% AFUE - Baseline $2,389.11 -

82% AFUE - Increased HX Area $2,421.05 $31.94 

83% AFUE - Max Tech $2,520.65 $131.53 

Oil-Fired Hot Water 

Boiler

84% AFUE - Baseline $4,955.55 -

85% AFUE - Increased HX Area $5,118.28 $162.73 

86% AFUE - Increased HX Area $5,373.95 $418.40 

91% AFUE - Condensing (Max Tech) $6,794.51 $1,838.96 

Oil-Fired Steam Boiler

82% AFUE - Baseline $4,105.16 -

84% AFUE - Increased HX Area $4,396.31 $291.15 

85% AFUE - Increased HX Area $4,502.11 $396.96 

86% AFUE - Max Tech $4,691.43 $586.27 

8.2.1.4 Future Product Prices

In its 2011 central air conditioning, heat pump, and furnace standards rulemaking,5 DOE 

derived a forecast of future furnace prices based on an analysis of the historic trend in the 

producer price index (PPI) for furnaces. Similarly, DOE believes that the historic PPI of heating 

equipment provide a reasonable basis for modeling the price trend of residential boilers.
8-12

DOE obtained historical PPI data for heating equipment from 1980-2012 from the Bureau 

of Labor Statistics’ (BLS).c The PPI data reflect nominal prices, adjusted for product quality 

changes. An inflation-adjusted (deflated) price index for heating equipment manufacturing was 

calculated by dividing the PPI series by the Gross Domestic Product Chained Price Index (see 

Figure 8.2.1).

Figure 8.2.1 Historical Nominal and Deflated Producer Price 

Indexes for Heating Equipment Manufacturing 

From 1980 to 2006, the deflated price index for heating equipment was relatively 

constant. Since then, the index has risen, primarily due to rising prices of copper, aluminum, and 

steel products which are the major raw material used in heating equipment. The rising prices for

copper and steel products were primarily a result of strong demand from China and other 

emerging economies. Given the slowdown in global economic activity in recent years, DOE 

believes that the extent to which the trends of the past five years will continue is very uncertain. 

Therefore, DOE decided to use constant prices as the default price assumption to project future 

heating equipment prices. Thus, projected prices for the LCC and PBP analysis are equal to the 

2012 values for each efficiency level in each product class.

 c

 Series ID PCU3353123353121; http://www.bls.gov/ppi/

0.000

0.200

0.400

0.600

0.800

1.000

1.200

0

50

100

150

200

250

300

Deflated PPI ($2012; 2012=1)

Nominal PPI (1980=100)

Heating equipment PPI Deflated heating equipment PPI (2012=1)
8-13

8.2.1.5 Installation Cost

DOE’s analysis of installation costs accounts for regional differences in labor costs. DOE 

estimated the installation costs at each considered efficiency level using a variety of sources, 

including RS Means 2012 Residential Cost Data,

6 manufacturer literature, and information from 

expert consultants. For a detailed discussion of the development of installation costs, see 

appendix 8-D.

The installation cost is the cost to the consumer of installing the boiler. The cost of 

installation covers all labor and material costs associated with the replacement of an existing 

boiler or the installation of a boiler in a new home, as well as delivery of the new boiler, removal 

of the existing boiler, and any applicable permit fees. Higher efficiency boilers may require 

additional installation costs. DOE’s analysis of installation costs estimated specific installation 

costs for each sample household based on building characteristics given in RECS 2009.

DOE gave separate consideration to the cost of installing a condensing gas and oil boilers

in replacement cases and in new homes. DOE conducted a detailed analysis of installation costs 

when a non-condensing boiler is replaced with a condensing boiler, with particular attention to 

venting issues in replacement applications. The installation cost depends on the boiler 

installation location which DOE determined using information from RECS 2009 and CBECS 

2003.

DOE estimated basic installation costs that are applicable to both replacement and new 

home installations. These costs, which apply to all boilers, include putting in place and setting up 

the boiler, gas or oil piping, water piping, ductwork, electrical hookup for the thermostat, permit,

and removal or disposal fees.

For replacement installations, DOE included a number of additional costs (“adders”) for 

a fraction of the sample households. For non-condensing boilers, these additional costs included 

updating flue vent connectors, vent resizing, chimney relining, and for a fraction of installations 

included the costs for stainless steel vent. For condensing boilers, these additional costs included 

adding a new flue vent (PVC), combustion air vent for direct vent installations (PVC), 

concealing vent pipes for indoor installations, addressing an orphaned water heater (by updating 

flue vent connectors, vent resizing, or chimney relining), and condensate removal.

DOE also included installation adders for new construction installations. For noncondensing boilers, a new flue vent (metal, including a fraction of stainless steel vent) is the only 

adder. For condensing gas boilers, the adders include new flue vent (PVC), combustion air vent

for direct vent installations (PVC), accounting for a commonly vented water heater, and 

condensate removal. 
8-14

8.2.1.6 Total Installed Cost

The total installed cost is the sum of the product price and the installation cost. MSPs, 

markups, and sales taxes all can take on a variety of values, depending on location, so the 

resulting total installed cost for a particular efficiency level will not be a single-point value, but 

rather a distribution of values. Table 8.2.5 presents the average total installed cost for each 

residential boiler product class at each efficiency level examined. 

Table 8.2.5 Average 

Total 

Installed 

Cost for 

Residential 

Boilers

(2013$)

Product Class Efficiency Level

Total Installed 

Cost

Incremental 

Cost

2013$ 2013$

Gas-Fired Hot Water Boiler

82% AFUE - Baseline $5,038.67 -

83% AFUE - Increased HX Area $5,142.43 $103.75 

84% AFUE - Increased HX Area $5,160.00 $121.33 

85% AFUE - Increased HX Area $5,383.10 $344.43 

90% AFUE - Condensing Baseline $6,067.50 $1,028.83 

92% AFUE - Increased HX Area $6,371.12 $1,332.45 

96% AFUE - Max Tech $7,018.27 $1,979.60 

Gas-Fired Steam Boiler

80% AFUE - Baseline $5,265.50 -

82% AFUE - Increased HX Area $5,338.57 $73.07 

83% AFUE - Max Tech $5,472.84 $207.35 

Oil-Fired Hot Water Boiler

84% AFUE - Baseline $6,860.55 -

85% AFUE - Increased HX Area $7,149.54 $288.98 

86% AFUE - Increased HX Area $7,364.48 $503.93 

91% AFUE - Condensing (Max 

Tech) $8,914.48 $2,053.93 

Oil-Fired Steam Boiler

82% AFUE - Baseline $6,855.95 -

84% AFUE - Increased HX Area $7,136.89 $280.94 

85% AFUE - Increased HX Area $7,256.05 $400.11 

86% AFUE - Max Tech $7,438.74 $582.79 
8-15

8.2.2 Operating Cost Inputs

DOE defined the operating cost by the following equation:

OC = EC+ RC+ MC

Eq. 8.3

Where:

OC = operating cost ($), 

EC = energy cost associated with operating the product ($),

RC = repair cost associated with component failure ($), and

MC = annual maintenance cost for maintaining product operation ($).

The remainder of this section provides information about the variables that DOE used to 

calculate the operating cost for residential boilers. The annual energy costs of the product are 

computed from energy consumption per unit for the baseline and standard-compliant cases 

(efficiency level 2, 3, and so on), combined with the energy prices. Product lifetime, discount 

rate, and compliance date of the standard are required for determining the operating cost and for 

establishing the operating cost present value. 

8.2.2.1 Annual Energy Use Savings

For each key product class, DOE calculated the annual energy use savings for each 

sample household at each efficiency level as described in chapter 7. 

DOE considered the possibility that some consumers may use a higher efficiency boiler

more than a baseline one, thereby negating some or all of the energy savings from the more

efficient equipment. Such change in behavior when operating costs decline is known as a 

rebound effect.

The take-back in energy consumption associated with the rebound effect provides 

consumers with increased value (e.g., more comfortable indoor temperature). DOE believes that, 

if it were able to monetize the increased value to consumers of the rebound effect, this value 

would be similar in value to the foregone energy savings. Therefore, the economic impacts on 

consumers with or without the rebound effect, as measured in the LCC analysis, are the same.

8.2.2.2 Energy Prices

DOE derived average monthly energy prices for a number of geographic areas in the 

United States using the latest data from EIA and monthly energy price factors that it developed. 

The process then assigns an appropriate energy price to each household and commercial building

in the sample, depending on its type (residential or commercial) and its location.

EIA Data. DOE derived 2011 annual electricity prices from EIA Form 826 data.

7 The 

EIA Form 826 data include energy prices by State. DOE calculated annual electricity prices for 

each RECS region or CBECS region by averaging monthly energy prices by State to get State 
8-16

electricity prices. For areas with more than one State, DOE weighted each State’s average price 

by its number of households in 2019. Table 8.2.6 and Table 8.2.7 show the electricity prices by 

region for residential and commercial sectors, respectively. (See appendix 8-C for more details.)

Table 8.2.6 Average

Residential 

Electricity 

Prices in 

2011

Region 

Code

Geographic Area Residential 

Electricity Prices

2013$/kWh

1 Connecticut, Maine, New Hampshire, Rhode Island, Vermont $0.17 

2 Massachusetts $0.15 

3 New York $0.19 

4 New Jersey $0.17 

5 Pennsylvania $0.14 

6 Illinois $0.12 

7 Indiana, Ohio $0.11 

8 Michigan $0.14 

9 Wisconsin $0.14 

10 Iowa, Minnesota, North Dakota, South Dakota $0.11 

11 Kansas, Nebraska $0.10 

12 Missouri $0.10 

13 Virginia $0.11 

14 Delaware, District of Columbia, Maryland $0.14 

15 Georgia $0.11 

16 North Carolina, South Carolina $0.11 

17 Florida $0.12 

18 Alabama, Kentucky, Mississippi $0.10 

19 Tennessee $0.10 

20 Arkansas, Louisiana, Oklahoma $0.09 

21 Texas $0.11 

22 Colorado $0.12 

23 Idaho, Montana, Utah, Wyoming $0.10 

24 Arizona $0.11 

25 Nevada, New Mexico $0.12 

26 California $0.15 

27 Oregon, Washington $0.09 

28 Alaska $0.18 

29 Hawaii $0.36 

30 West Virginia $0.10 
8-17

Table 8.2.7 Average 

Commercial 

Electricity 

Prices in 

2011

Region Code Census Division Commercial Electricity 

Prices

2013$/kWh

1 New England $0.15 

2 Middle Atlantic $0.14 

3 East North Central $0.10 

4 West North Central $0.09 

5 South Atlantic $0.11 

6 East South Central $0.10 

7 West South Central $0.09 

8 Mountain $0.09 

9 Pacific $0.10 

DOE obtained the data for natural gas prices from EIA’s Natural Gas Navigator,

8 which

includes monthly natural gas prices by State for residential, commercial, and industrial 

customers. For areas with more than one State, DOE weighted each State’s average price by its

number of households in 2020. Table 8.2.8 and Table 8.2.9 show the natural gas prices by region

for residential and commercial sectors, respectively. (See appendix 8-C for more details.) 
8-18

Table 8.2.8 Average 

Residential 

Natural Gas 

Prices in 

2011

Region Code Geographic Area Residential 

Gas Prices

2013$/kWh

1 Connecticut, Maine, New Hampshire, Rhode Island, Vermont $16.05 

2 Massachusetts $14.26 

3 New York $15.92 

4 New Jersey $12.72 

5 Pennsylvania $14.81 

6 Illinois $11.02 

7 Indiana, Ohio $13.47 

8 Michigan $11.81 

9 Wisconsin $10.95 

10 Iowa, Minnesota, North Dakota, South Dakota $10.45 

11 Kansas, Nebraska $11.89 

12 Missouri $16.83 

13 Virginia $15.44 

14 Delaware, District of Columbia, Maryland $14.88 

15 Georgia $19.53 

16 North Carolina, South Carolina $16.47 

17 Florida $20.03 

18 Alabama, Kentucky, Mississippi $13.69 

19 Tennessee $13.17 

20 Arkansas, Louisiana, Oklahoma $13.94 

21 Texas $13.08 

22 Colorado $9.82 

23 Idaho, Montana, Utah, Wyoming $9.39 

24 Arizona $17.55 

25 Nevada, New Mexico $11.02 

26 California $10.32 

27 Oregon, Washington $13.29 

28 Alaska $9.11 

29 Hawaii $56.09 

30 West Virginia $13.02 
8-19

Table 8.2.9 Average 

Commercial 

Natural Gas

Prices in 

2011

Region 

Code

Census Division Commercial 

Gas Prices

2013$/kWh

1 New England $11.12 

2 Middle Atlantic $9.74 

3 East North Central $9.07 

4 West North Central $8.02 

5 South Atlantic $10.91 

6 East South Central $9.64 

7 West South Central $8.81 

8 Mountain $8.24 

9 Pacific $10.13 

DOE collected 2011 average LPG prices from EIA’s 2011 State Energy Consumption, 

Price, and Expenditures Estimates (SEDS).9 SEDS includes annual LPG prices for residential, 

commercial, industrial, and transportation consumers by state. For areas with more than one 

State, DOE weighted each State’s average price by its number of households. Table 8.2.10 and 

Table 8.2.11 show the LPG prices by region for residential and commercial sectors, respectively.

See appendix 8-C includes more details.

Table 8.2.10 Average 

Residential 

LPG Prices 

in 2011

Region 

Code

Geographic Area Residential 

LPG Prices

2013$/kWh

1 Connecticut, Maine, New Hampshire, Rhode Island, Vermont $34.99 

2 Massachusetts $38.93 

3 New York $35.43 

4 New Jersey $37.19 

5 Pennsylvania $32.38 

6 Illinois $24.71 

7 Indiana, Ohio $26.88 

8 Michigan $24.66 

9 Wisconsin $23.46 

10 Iowa, Minnesota, North Dakota, South Dakota $24.75 

11 Kansas, Nebraska $24.61 

12 Missouri $24.24 

13 Virginia $28.19 
8-20

14 Delaware, District of Columbia, Maryland $37.89 

15 Georgia $29.16 

16 North Carolina, South Carolina $30.36 

17 Florida $42.20 

18 Alabama, Kentucky, Mississippi $29.65 

19 Tennessee $30.61 

20 Arkansas, Louisiana, Oklahoma $29.69 

21 Texas $31.59 

22 Colorado $27.40 

23 Idaho, Montana, Utah, Wyoming $27.43 

24 Arizona $36.48 

25 Nevada, New Mexico $31.36 

26 California $35.21 

27 Oregon, Washington $30.23 

28 Alaska $39.83 

29 Hawaii $66.29 

30 West Virginia $29.93 

Table 8.2.11 Average 

Commercial

LPG Prices 

in 2011

Region 

Code

Census Division Commercial 

LPG Prices

2013$/kWh

1 New England $26.82 

2 Middle Atlantic $27.26 

3 East North Central $22.49 

4 West North Central $22.57 

5 South Atlantic $27.05 

6 East South Central $22.82 

7 West South Central $24.17 

8 Mountain $22.60 

9 Pacific $25.29 

DOE collected 2011 average residential fuel oil prices from EIA’s SEDS. 9 SEDS

includes annual fuel oil prices for residential, commercial, industrial, and transportation 

consumers by state. For areas with more than one State, DOE weighted each State’s average 

price by its number of households. Table 8.2.12 and Table 8.2.13 show the fuel oil prices by 

region for residential and commercial sectors, respectively.. Appendix 8-C includes more details.
8-21

Table 8.2.12 Average 

Residential 

Fuel Oil

Prices in 

2011

Region 

Code

Geographic Area Residential Oil 

Prices

2013$/kWh

1 Connecticut, Maine, New Hampshire, Rhode Island, Vermont $25.34 

2 Massachusetts $26.09 

3 New York $26.50 

4 New Jersey $27.10 

5 Pennsylvania $26.81 

6 Illinois $28.13 

7 Indiana, Ohio $28.04 

8 Michigan $28.07 

9 Wisconsin $27.81 

10 Iowa, Minnesota, North Dakota, South Dakota $28.17 

11 Kansas, Nebraska $28.02 

12 Missouri $27.60 

13 Virginia $27.81 

14 Delaware, District of Columbia, Maryland $26.79 

15 Georgia $27.54 

16 North Carolina, South Carolina $27.89 

17 Florida $28.07 

18 Alabama, Kentucky, Mississippi $27.64 

19 Tennessee $28.34 

20 Arkansas, Louisiana, Oklahoma $25.82 

21 Texas $26.07 

22 Colorado $25.77 

23 Idaho, Montana, Utah, Wyoming $25.78 

24 Arizona $29.06 

25 Nevada, New Mexico $26.57 

26 California $29.38 

27 Oregon, Washington $28.82 

28 Alaska $27.27 

29 Hawaii $28.36 

30 West Virginia $28.07 
8-22

Table 8.2.13 Average 

Commercial

Fuel Oil

Prices in 

2011

Region 

Code

Census Division Commercial Oil 

Prices

2013$/kWh

1 New England $26.06 

2 Middle Atlantic $25.32 

3 East North Central $24.95 

4 West North Central $25.23 

5 South Atlantic $24.50 

6 East South Central $25.06 

7 West South Central $24.52 

8 Mountain $24.42 

9 Pacific $25.79 

Monthly Prices. To determine monthly prices for use in the analysis, DOE developed 

monthly energy price factors for each fuel based on long-term price data. See appendix 8-C, for a 

description of the method. DOE multiplied the annual prices shown in the previous tables by the 

monthly price factors for each fuel to derive prices for each month.

Electricity and Natural Gas Marginal Prices. Electricity and natural gas prices were 

adjusted using seasonal marginal price factors to come up with monthly marginal electricity and 

natural gas prices. For a detailed discussion of the development of marginal energy price factors, 

see appendix 8-C.

Household Energy Price Adjustment Factor. RECS 2009 and CBECS2003 reports 

the total annual consumption and expenditure of each energy use type. To take into account that 

household energy prices vary inside a geographical area, DOE developed an adjustment factor 

based on the reported average energy price in RECS 2009 and CBECS 2003 for each building 

divided by the average energy price in the geographical region in RECS 2009 and CBECS 2003. 

This factor was then multiplied times the monthly price developed above to come up with the 

household energy price. Appendix 8-C includes more details.

8.2.2.3 Energy Price Trends

To arrive at prices in future years, DOE multiplied the prices described in the preceding 

section by the forecasts of annual average price changes in EIA’s AEO 2013.

1 Figure 8.2.2

shows the national residential energy price trends. To estimate the trend after 2040, DOE used 

the average rate of change during 2030–2040. 

DOE applied the projected energy price for each of the nine census divisions to each 

building in the sample based on the building’s location. Appendix 8-C includes more details.
8-23

Figure 8.2.2 Projected Residential Energy Prices

Figure 8.2.3 Projected Commercial Energy Prices

8.2.2.4 Repair Cost

The repair cost is the cost to the consumer for replacing or repairing components in the 

residential boiler that have failed (such as motor pump replacement and inducer motor). The

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

201020122014201620182020202220242026

2028

203020322034203620382040

Residential Electricity Price (in 

2011$/MMBtu)

Residential Natural Gas Price 

(in 2011$/MMBtu)

Residential LPG Price (in 

2011$/MMBtu)

Residential Fuel-Oil Price (in 

2011$/MMBtu)

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

20102012201420162018

20202022

202420262028203020322034

203620382040

Commercial Electricity Price (in 

2011$/MMBtu)

Commercial Natural Gas Price 

(in 2011$/MMBtu)

Commercial LPG Price (in 

2011$/MMBtu)

Commercial Fuel-Oil Price (in 

2011$/MMBtu)
8-24

repair costs at each considered efficiency level were based on 2013 RS Means Facilities 

Maintenance and Repair Data 10 and a consultant report. DOE accounts for regional differences 

in labor costs. 

For a detailed discussion of the development of repair costs, see appendix 8-D, 

Installation, Repair, and Maintenance Cost Calculations.

Table 8.2.14 shows the annualized repair cost estimates for each product class.
8-25

Table 8.2.14 Annualized 

Repair Cost 

for 

Residential 

Boilers

(2013$)

Product Class Efficiency Level

Annualized 

Repair 

Cost

Incremental 

Cost

2013$ 2013$

Gas-Fired Hot Water Boiler

82% AFUE - Baseline $12.35 -

83% AFUE - Increased HX Area $12.75 $0.40 

84% AFUE - Increased HX Area $12.75 $0.40 

85% AFUE - Increased HX Area $13.53 $1.17 

90% AFUE - Condensing Baseline $18.54 $6.18 

92% AFUE - Increased HX Area $18.54 $6.18 

96% AFUE - Max Tech $18.54 $6.18 

Gas-Fired Steam Boiler

80% AFUE - Baseline $11.95 -

82% AFUE - Increased HX Area $12.13 $0.19 

83% AFUE - Max Tech $12.30 $0.35 

Oil-Fired Hot Water Boiler

84% AFUE - Baseline $12.42 -

85% AFUE - Increased HX Area $13.08 $0.66 

86% AFUE - Increased HX Area $13.42 $1.01 

91% AFUE - Condensing (Max 

Tech) $18.31 $5.90 

Oil-Fired Steam Boiler

82% AFUE - Baseline $12.33 -

84% AFUE - Increased HX Area $12.33 $0.00 

85% AFUE - Increased HX Area $12.39 $0.06 

86% AFUE - Max Tech $12.39 $0.06 

8.2.2.5 Maintenance Cost

The maintenance cost is the routine cost to the consumer of maintaining equipment 

operation. DOE assumes that this maintenance cost is the same at all efficiency levels.

Labor hours and costs for annual maintenance were estimated using RS Means data. The 

frequency with which the maintenance occurs was derived from a consumer survey

11 on the 
8-26

frequency with which owners of different types of boilers perform maintenance. For a detailed 

discussion of the development of maintenance costs, see appendix 8-D.

Table 8.2.15 Annualized 

Maintenance

Cost for 

Residential 

Boilers

(2013$)

Product Class Efficiency Level

Annualized 

Maintenance 

cost

Incremental 

Cost

2013$ 2013$

Gas-Fired Hot Water Boiler

82% AFUE - Baseline $85.03 -

83% AFUE - Increased HX Area $85.03 $0.00 

84% AFUE - Increased HX Area $85.03 $0.00 

85% AFUE - Increased HX Area $85.03 $0.00 

90% AFUE - Condensing Baseline $85.03 $0.00 

92% AFUE - Increased HX Area $85.03 $0.00 

96% AFUE - Max Tech $85.03 $0.00 

Gas-Fired Steam Boiler

80% AFUE - Baseline $86.87 -

82% AFUE - Increased HX Area $86.87 $0.00 

83% AFUE - Max Tech $86.87 $0.00 

Oil-Fired Hot Water Boiler

84% AFUE - Baseline $112.65 -

85% AFUE - Increased HX Area $112.65 $0.00 

86% AFUE - Increased HX Area $112.65 $0.00 

91% AFUE - Condensing (Max 

Tech) $112.92 $0.27 

Oil-Fired Steam Boiler

82% AFUE - Baseline $124.18 -

84% AFUE - Increased HX Area $124.18 $0.00 

85% AFUE - Increased HX Area $124.18 $0.00 

86% AFUE - Max Tech $124.18 $0.00 

8.2.2.6 Lifetime

DOE defines lifetime as the age when a product is retired from service. DOE used 

national survey data, along with manufacturer shipment data, to calculate the distribution of 

residential boiler lifetimes. For a detailed discussion of the development of boiler lifetime, see 

appendix 8-E.
8-27

Table 8.2.16 shows the Weibull distribution parameters alpha, beta and the location. DOE 

assumed that the lifetime of a residential boiler is the same across the different product classes 

and efficiency levels.

Table 8.2.16 Lifetime 

Parameters 

for 

Residential 

Boilers

Product Class Weibull Parameters

Alpha (scale) Beta (shape) Location (delay)

Boilers 24.55 2.00 5.00

8.2.2.7 Discount Rates

The discount rate is the rate at which future expenditures and savings are discounted to 

establish their present value. The cost of capital is commonly used to estimate the present value 

of cash flows to be derived from an investment. Following financial theory, the finance cost of 

raising funds for expenditure can be interpreted as: (1) the financial cost of any debt incurred to 

maintain equipment, or (2) the opportunity cost of any equity used to maintain equipment. 

Similarly, the value of cost savings can be interpreted as: (1) the cost avoided by decreasing debt, 

or (2) the return earned from increasing equity holdings. 

DOE estimates discount rates separately for residential and commercial end users. For 

commercial end users, DOE calculates commercial discount rates as the weighted average cost of 

capital (WACC), using the Capital Asset Pricing Model (CAPM). For residential end users, 

DOE calculates discount rates as the weighted average real interest rate across consumer debt 

and equity holdings.

Discount Rates for Residential Applications

Discount Rates for Replacement Products Purchased by Existing Households

DOE’s approach involved identifying all possible debt or asset classes that might 

approximate the opportunity cost of funds used to purchase efficient appliances. These are shown 

in Table 8.2.17.

As a way of weighting the debt or asset classes, DOE estimated the average percentage 

shares of the various types of debt and equity using data from the Federal Reserve Board’s 

Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010.

13

DOE derived the mean percentages of each source of financing throughout the 7 years surveyed.

These long-term averages are seen as most appropriate for use in the analysis. 
8-28

Table 8.2.17 Types of 

Household 

Debt and 

Equity by 

Percentage 

Shares (%)

Type of Debt or Equity 1989 1992 1995 1998 2001 2004 2007 2010 Mean

Home equity loan 4.3 4.5 2.7 2.8 2.8 4.4 4.6 4.4 3.8

Credit card 1.6 2.1 2.6 2.2 1.7 2.0 2.4 2.1 2.1

Other installment loan 2.8 1.7 1.4 1.7 1.1 1.3 1.1 1.3 1.6

Other residential loan 4.4 6.9 5.2 4.3 3.1 5.8 7.1 7.3 5.5

Other line of credit 1.1 0.6 0.4 0.2 0.3 0.5 0.3 0.8 0.5

Checking account 5.8 4.7 4.9 3.9 3.6 4.2 3.4 4.3 4.4

Savings or money market account 19.2 18.8 14.0 12.8 14.2 15.1 13.0 16.2 15.4

Certificate of deposit 14.5 11.7 9.4 7.0 5.4 5.9 6.5 6.7 8.4

Savings bond 2.2 1.7 2.2 1.1 1.2 0.9 0.7 0.6 1.3

Bonds 13.8 12.3 10.5 7.0 7.9 8.4 6.7 7.3 9.2

Stocks 22.4 24.0 25.9 36.9 37.5 28.0 28.6 23.4 28.3

Mutual funds 8.0 11.1 20.9 20.1 21.3 23.4 25.5 25.6 19.5

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010.

DOE then estimated return or interest rates associated with each type of equity and debt. 

The source for interest rates for loans, credit cards, and lines of credit was the Federal Reserve 

Board’s Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 

2010. Table 8.2.18 shows the average nominal rates in each year and the inflation factors used to 

calculate real rates. DOE calculated effective interest rates for home equity loans in a similar 

manner as for mortgage rates, because interest on both such loans is tax deductible. Table 8.2.19

shows the average effective real rates in each year and the mean rate across years. Because the 

interest rates for each type of household debt reflect economic conditions throughout numerous 

years, they are expected to be representative of rates that may be in effect in 2020.
8-29

Table 8.2.18 Average 

Nominal 

Interest 

Rates for 

Household 

Debt

Type of Debt

1989,

%

1992,

%

1995,

%

1998,

%

2001,

%

2004,

%

2007,

%

2010,

%

Mean,

%

Home equity loan 11.5 9.6 9.6 9.8 8.7 5.7 7.9 6.0 8.6

Credit card* - - 14.2 14.5 14.2 11.7 12.6 13.9 13.5

Other installment loan 9.0 7.8 9.3 7.8 8.7 7.4 10.4 10.4 8.8

Other residential loan 8.8 7.6 7.7 7.7 7.5 6.0 6.3 6.0 7.2

Other line of credit 14.8 12.7 12.4 11.9 14.7 8.8 12.7 10.6 12.4

Inflation rate 4.82 3.01 2.83 1.56 2.85 2.66 2.85 1.64

Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 2007 and 2010.

* No data on interest rates available for credit cards in 1989 or 1992.

Table 8.2.19 Average 

Real 

Effective 

Interest 

Rates for 

Household 

Debt

Type of Debt

1989,

%

1992,

%

1995,

%

1998,

%

2001,

%

2004,

%

2007,

%

2010,

%

Mean,

%

Home equity loan 3.8 4.3 4.4 5.8 3.8 1.9 2.1 3.1 3.8

Credit card* - - 11.0 12.7 11.1 9.1 3.3 12.1 11.0

Other installment loan 4.9 5.8 7.0 6.6 6.1 5.4 9.7 9.0 6.7

Other residential loan 4.0 4.7 4.8 6.0 4.6 3.3 3.4 4.3 4.4

Other line of credit 9.6 9.4 9.3 10.2 11.7 6.0 9.7 8.8 9.4

Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 

2007, and 2010.

* No data on interest rates available for credit cards in 1989 or 1992.

No similar rate data are available from the SCF for classes of assets, so the Department 

derived that information from national historical data. The interest rates associated with 

certificates of deposit,14 savings bonds,15 and bonds (AAA corporate bonds)16 were collected 

from Federal Reserve Board time-series data for 1977–2012. DOE assumed rates on checking 

accounts to be zero. Rates on savings and money market accounts came from Cost of Savings 

Index data covering 1984–2012.

17 The rates for stocks are the annual returns on the Standard and 

Poor’s 500 for 1977–2012.

18 Rates for mutual funds are a weighted average of the stock rates 

(two-thirds weight) and the bond rates (one-third weight) in each year for 1977–2012. DOE 
8-30

adjusted the nominal rates to real rates using the annual inflation rate for each year. Average 

nominal and real interest rates for the classes of household assets are listed in Table 8.2.20. 

Because the interest and return rates for each type of asset reflect economic conditions 

throughout numerous years, they are expected to be representative of rates that may be in effect 

in 2020.

Table 8.2.20 Average 

Nominal and 

Real Interest 

Rates for 

Household 

Equity

Type of Equity Average Nominal Rate 

%

Average Real Rate 

%

Checking account - 0.0

Savings and money market accounts 5.0 2.0

Certificate of deposit 6.0 1.9

Savings bond 7.3 3.2

Bonds 8.1 3.9

Stocks 11.9 7.7

Mutual funds 10.4 6.2

Table 8.2.21 summarizes the shares and mean real effective rates of each type of equity 

or debt. The average rate across all types of household debt and equity, weighted by the 

percentages of each type, is 5.0 percent.
8-31

Table 8.2.21 Average 

Shares and 

Rates for

Household 

Debt and 

Equity

Type of Debt or Equity

Average Percentage of 

Household Debt plus Equity

%*

Mean Effective Real Rate 

%**

Home equity loan 3.8 3.8

Credit card 2.1 11.0

Other installment loan 1.6 6.7

Other residential loan 5.5 4.4

Other line of credit 0.5 9.4

Checking account 4.4 0.0

Savings and money market account 15.4 2.0

Certificate of deposit 8.4 1.9

Savings bond 1.3 3.2

Bonds 9.2 3.9

Stocks 28.3 7.7

Mutual funds 19.5 6.2

Total/weighted-average discount rate 100.0 5.0

* Not including primary mortgage or retirement accounts.

** Adjusted for inflation and, for home equity loans, tax deduction of interest.

DOE developed a normal probability distribution of rates for each debt or asset type by 

using the mean value and standard deviation from the distribution. To account for variation 

among households, DOE sampled a rate for each household from the distributions for the 

appropriate asset class. Appendix 8-F presents the probability distributions for each class that 

DOE used in the LCC and PBP analysis.

Discount Rates for Products Installed in New Housing 

DOE estimated discount rates for new-housing appliances using the effective real (afterinflation) mortgage rate for homebuyers. This rate corresponds to the interest rate after deduction 

of mortgage interest for income tax purposes and after adjusting for inflation (using the Fisher 

formula).d For example, a 6% nominal mortgage rate has an effective nominal rate of 4.5% for a 

household at the 25% marginal tax rate. When adjusted for an inflation rate of 2%, the effective 

real rate becomes 2.45%.

 d Fisher formula is given by: Real Interest Rate = [(1 + Nominal Interest Rate) / (1 + Inflation Rate)] – 1.
8-32

The data sources DOE used for mortgage interest rates were the SCF in 1989, 1992, 

1995, 1998, 2001, 2004, 2007, and 2010. Using the appropriate SCF data for each year, DOE 

adjusted the mortgage interest rate for each relevant household in the SCF for mortgage tax 

deduction and inflation (see Table 8.2.22). In cases where the effective interest rate is equal to or 

below the inflation rate (resulting in a negative real interest rate), DOE set the real effective 

interest rate to zero.

The average nominal mortgage rate carried by homeowners in these 6 years was 7.9%. 

As the mortgage rates carried by households in these years were established over a range of time, 

DOE believes they are representative of rates that may apply when amended standards take 

effect. After adjusting for inflation and interest tax deduction, effective real interest rates on 

mortgages across the six surveys averaged 3.0%.

Table 8.2.22 Data Used to 

Calculate 

Real 

Effective 

Mortgage 

Rates

Year Mortgage Interest Rates in Selected Years 

%

Average Nominal 

Interest Rate

Inflation Rate19 Marginal Tax Rate 

Applicable to Mortgage 

Interest20

Average Real 

Effective Interest Rate

1989 9.7 4.82 24.1 2.4

1992 9.1 3.01 23.2 3.9

1995 8.2 2.83 24.2 3.3

1998 7.9 1.56 25.0 4.3

2001 7.6 2.85 24.2 2.8

2004 6.2 2.66 20.9 2.2

2007 6.3 2.85 20.6 2.1

2010 5.7 1.64 20.0 2.9

Average 7.6 3.0

To account for variation among households, DOE sampled a rate for each household in 

the RECS samples from a distribution of mortgage rates. DOE developed the distribution based 

on the SCF data. Appendix 8-F presents the probability distribution that DOE used in the LCC 

and PBP analysis.

Discount Rates for Commercial Applications

DOE calculates commercial discount rates as the weighted average cost of capital 

(WACC), using the Capital Asset Pricing Model (CAPM). Most companies use both debt and 

equity capital to fund investments, so their cost of capital is the weighted average of the cost of 
8-33

equity and debt financing, as estimated from financial data for publicly traded firms in the 

sectors that purchase residential boilers.

12

Damodaran Online, a widely used source of information about company debt and equity 

financing, was used as the primary source of data for this analysis.21 Companies included in the 

Damondaran Online database were assigned to the aggregate categories listed below:

• Retail

• Property owners

• Medical services

• Industrial

• Lodging

• Food Service

• Offices

• Public 

DOE estimated the cost of equity using the capital asset pricing model (CAPM).22 The 

CAPM assumes that the cost of equity (ke) for a particular company is proportional to the 

systematic risk faced by that company, where high risk is associated with a high cost of equity 

and low risk is associated with a low cost of equity. The systematic risk facing a firm is 

determined by several variables: the risk coefficient of the firm (β), the expected return on riskfree assets (Rf), and the equity risk premium (ERP). The risk coefficient of the firm indicates the 

risk associated with that firm relative to the price variability in the stock market. The expected 

return on risk-free assets is defined by the yield on long-term government bonds. The ERP

represents the difference between the expected stock market return and the risk-free rate. The 

cost of equity financing is estimated using the following equation, where the variables are 

defined as above:

k R ( ERP) e = f + β ×

Eq. 8.4

Where:

ke = cost of equity,

Rf = expected return on risk-free assets,

β = risk coefficient of the firm, and

ERP = equity risk premium.

By taking a forty-year geometric average of Federal Reserve data on annual nominal 

returns for 10-year Treasury bills, DOE found for this analysis the following risk free rates for 

2010-2012 (Table 8.2.23).24 DOE also estimated the ERP by calculating the difference between 

risk free rate and stock market return for the same time period.25
8-34

Table 8.2.23 Risk free 

rate and 

equity risk 

premium, 

2010-2012

Year Risk free rate (%) ERP (%)

2010 6.74% 3.23%

2011 6.61% 2.94%

2012 6.41% 3.99%

The cost of debt financing (kd) is the interest rate paid on money borrowed by a company. 

The cost of debt is estimated by adding a risk adjustment factor (Ra) to the risk-free rate. This 

risk adjustment factor depends on the variability of stock returns represented by standard 

deviations in stock prices. So for firm i, the cost of debt financing is:

kdi = Rf + Rai

Eq. 8.5

Where:

kdi = cost of debt financing for firm, i,

Rf = expected return on risk-free assets, and

Rai = risk adjustment factor to risk-free rate for firm, i. 

DOE estimates the WACC using the following equation:

e e d wd WACC = k ×w + k ×

Eq. 8.6

Where:

WACC = weighted average cost of capital,

we = proportion of equity financing, and

wd = proportion of debt financing.

By adjusting for the influence of inflation, DOE estimates the real weighted average cost 

of capital, or discount rate, for each company. DOE then aggregates the company real weighted 

average costs of capital to estimate the discount rate for each of the ownership types in the 

residential boiler analysis. An overall average is estimated by weighting each ownership type’s 

discount rate by its estimated share of the residential boiler market. These values are presented 

in Table 8.2.24. While WACC values for any category may trend higher or lower over 

substantial periods of time, these values represent a private sector cost of capital that is averaged 

over major business cycles. 
8-35

Several parameters of the cost of capital equations can vary substantially over time, and 

therefore the estimates can vary with the time period over which data is selected and the 

technical details of the data averaging method. For guidance on the time period for selecting and 

averaging data for key parameters and the averaging method, DOE used Federal Reserve 

methodologies for calculating these parameters. In its use of the CAPM, the Federal Reserve 

uses a forty-year period for calculating discount rate averages, utilizes the gross domestic 

product price deflator for estimating inflation, and considers the best method for determining the 

risk free rate as one where “the time horizon of the investor is matched with the term of the riskfree security.”

23

Table 8.2.24 Weighted 

Average 

Cost of 

Capital for 

Sectors that 

Purchase 

Residential 

Boilers

Sector Min Mean Max

Retail 0.8% 5.3% 18.3%

Property owners -1.3% 6.1% 10.8%

Medical services 0.6% 10.1% 8.9%

Industrial -0.2% 11.5% 8.2%

Lodging 3.7% 8.6% 15.8%

Food Service 1.8% 10.9% 8.6%

Offices 1.1% 7.9% 16.6%

Public Assembly 1.4% 10.4% 10.1%

Education 1.8% 10.7% 9.4%

Government 2.6% 8.4% 13.9%

Source: Damodaran Online Data Page: Costs of Capital by Industry Sector, 2010,2011,2012.

8.2.2.8 Compliance Date of Standard

Pursuant to 42 U.S.C. 6295(m), the compliance date of any new energy efficiency 

standard for residential boilers is 5 years after the final rule is published. Consistent with its 

published regulatory agenda, DOE assumed that the final rule would be issued by the end of

2014 and that, therefore, the new standards would require compliance beginning in 2020. DOE 

calculated the LCC and PBP for all consumers as if they each would purchase a new boiler in 

2020.

8.2.2.9 Base Case Distribution of Efficiency Levels

To estimate the market shares of the different efficiency levels in each residential boiler

product class in 2020, DOE developed data on the share of models in each product class that are 
8-36

of the different designs based on the latest AHRI certification directory (see Table 8.2.25).

26 In 

addition, for gas-fired hot water boilers, DOE accounted for the regional differences in the 

market shares by efficiency levels. For a detailed discussion of the development of base case 

distributions, see appendix 8-H.

Table 8.2.25 Base Case 

Market 

Shares in 

(2020) by 

Efficiency 

Level for 

Boilers

EL Design Option Fraction of Models

Gas-fired Hot Water Boiler

0 82% AFUE – Baseline 23%

1 83% AFUE – Increased HX Area 12%

2 84% AFUE – Increased HX Area 14%

3 85% AFUE – Increased HX Area 11%

4 90% AFUE – Condensing Baseline 14%

5 92% AFUE – Increased HX Area 19%

6 96% AFUE – Max Tech 6%

Gas-fired Steam Boiler

0 80% AFUE – Baseline 14%

1 82% AFUE – Increased HX Area 75%

2 83% AFUE – Max Tech 11%

Oil-fired Hot Water Boiler

0 84% AFUE – Baseline 35%

1 85% AFUE – Increased HX Area 27%

2 86% AFUE – Increased HX Area 35%

3 91% AFUE – Max Tech 3%

Oil-fired Steam Boiler

0 82% AFUE – Baseline 27%

1 84% AFUE – Increased HX Area 32%

2 85% AFUE – Increased HX Area 31%

3 86% AFUE – Max Tech 11%

8.3 PAYBACK PERIOD INPUTS

The PBP is the amount of time it takes the customer to recover the assumed higher 

purchase cost of more energy-efficient equipment as a result of lower operating costs. 

Numerically, the PBP is the ratio of the increase in purchase cost (i.e., from a less efficient 

design to a more efficient design) to the decrease in first year annual operating expenditures.
8-37

The equation for PBP is:

PBP =∆IC/∆OC

Eq. 8.7

Where:

PBP = payback period in years,

∆ IC = difference in the total installed cost between the more efficient standard-level equipment 

(efficiency levels 2, 3, etc.) and the baseline efficiency equipment, and

∆OC = difference in first year annual operating costs.

Payback periods are expressed in years. Payback periods can be greater than the life of 

the equipment if the increased total installed cost of the more efficient equipment is not 

recovered fast enough in reduced operating costs.

DOE also calculates a rebuttable PBP, which is the time it takes the consumer to recover 

the assumed higher purchase cost of more energy-efficient equipment as a result of lower energy 

costs. Numerically, the rebuttable PBP is the ratio of the increase in purchase cost (i.e., from a 

less efficient design to a more efficient design) to the decrease in annual energy expenditures; 

that is, the difference in first year annual energy cost as calculated from the DOE test procedure. 

The calculation excludes repair costs and maintenance costs. 

The data inputs to PBP are the total installed cost of the equipment to the customer for 

each efficiency level and the annual (first year) operating costs for each efficiency level. The 

inputs to the total installed cost are the equipment price and the installation cost. The inputs to 

the operating costs are the annual energy cost, the annual repair cost, and the annual maintenance 

cost (or, in the case of rebuttable PBP, only the annual energy cost). The PBP uses the same 

inputs as the LCC analysis, except that electricity price trends are not required. Since the PBP is 

a “simple” payback, the required electricity cost is only for the year in which a new efficient 

standard is to take effect—in this case, 2020. 

8.4 LCC AND PBP RESULTS 

As discussed previously, DOE’s approach for conducting the LCC and PBP analysis 

relied on developing samples of households that use each of the products. DOE used a Monte 

Carlo simulation technique to perform the LCC and PBP calculations on the households in the 

sample. For each set of sample households using the equipment in each product class, DOE 

calculated the average LCC and LCC savings and the median and average PBP for each of the 

efficiency levels. These efficiency levels are also referred to as candidate standard levels (CSLs).

DOE calculated LCC savings and PBPs relative to the base case equipment that it 

assigned to the households. In some cases, DOE assigned base case equipment that is more 

efficient than the baseline and some of the CSLs. For that reason, in those cases the average LCC 

impacts are not equal to the difference between the LCC of a specific CSL and the LCC of the 

baseline product. DOE calculated the average LCC savings and the median PBP values by 

excluding the households that are not impacted by a standard at a given efficiency level. 
8-38

LCC and PBP calculations were performed 10,000 times on the sample of households 

established for each residential product. Each LCC and PBP calculation was performed on a 

single household that was selected from the sample of the residential users. The selection of a 

household was based on its sample weight (i.e., how representative a particular household is of 

other households in the distribution—either regionally or nationally) in the 2009 RECS Public 

Use Sample, as described in chapter 7. Each LCC and PBP calculation also sampled from the 

probability distributions that DOE developed to characterize many of the inputs to the analysis.

Based on the Monte Carlo simulations that DOE performed, for each standard level, DOE 

calculated the share of households receiving a net LCC benefit, a net LCC cost, and no impact. 

DOE considered a household to receive no impact at a given standard level if DOE assigned it 

base case equipment whose efficiency is the same as, or is more than, the CSL. 

8.4.1 Gas-Fired Hot Water Boilers

Table 8.4.1 summarizes the LCC and PBP results for gas-fired hot water boilers. 

Table 8.4.1 Gas-Fired 

Hot Water 

Boilers: 

LCC and 

PBP Results

EL AFUE

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 82% $5,138 $25,034 $30,171 NA 0% 100% 0% NA

1 83% $5,240 $24,789 $30,029 $21 3% 83% 15% 1.7

2 84% $5,258 $24,533 $29,790 $81 2% 73% 25% 1.8

3 85% $5,483 $24,315 $29,798 $65 11% 62% 27% 6.8

4 90% $6,183 $23,281 $29,463 $98 28% 53% 19% 25.3

5 92% $6,486 $23,013 $29,499 $68 42% 34% 24% 25.9

6 96% $7,132 $22,202 $29,335 $217 53% 8% 39% 20.8

Figure 8.4.1 shows the range of LCC savings for the efficiency levels considered for non

gas-fired hot water boilers. For each standard level, the top and the bottom of the box indicate 

the 75th and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 

50 percent of the households have lifecycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level. 
8-39

Figure 8.4.1 Distribution of LCC Savings for Gas-Fired Hot 

Water Boilers

Figure 8.4.2 shows the range of PBPs for all efficiency levels considered for gas-fired hot 

water boilers.

-3000

-2000

-1000

0

1000

2000

3000

4000

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6

Average LCC Savings 2013$

Efficiency Level

Gas-Fired Hot Water Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-40

Figure 8.4.2 Distributions of PBP for Gas-Fired Hot Water 

Boilers

The rebuttable PBP for each efficiency level is shown in Table 8.4.2.

Table 8.4.2 Rebuttable 

Payback 

Period for 

Gas-Fired 

Hot Water 

Boilers

EL Technology Option Rebuttable Payback Period years

1 83% AFUE - Increased HX Area 7.4

2 84% AFUE - Increased HX Area 4.6

3 85% AFUE - Increased HX Area 11.4

4 90% AFUE - Condensing Baseline 9.7

5 92% AFUE - Increased HX Area 10.4

6 96% AFUE - Max Tech 11.6

0

20

40

60

80

100

120

140

160

180

200

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6

Average Payback Period (years)

Efficiency Level

Gas-Fired Hot Water Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-41

8.4.2 Gas-Fired Steam Boilers

Table 8.4.3 summarizes the LCC and PBP results for steam gas boilers. 

Table 8.4.3 Gas-Fired 

Steam 

Boilers: 

LCC and 

PBP Results

EL AFUE

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 80% $5,352 $22,172 $27,523 NA 0% 100% 0% NA

1 82% $5,424 $21,719 $27,143 $52 1% 87% 13% 1.6

2 83% $5,558 $21,501 $27,059 $414 10% 11% 79% 4.6

Figure 8.4.3 shows the range of LCC savings for the efficiency levels considered for gasfired steam boilers. For each standard level, the top and the bottom of the box indicate the 75th

and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 50 

percent of the households have life-cycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level. 
8-42

Figure 8.4.3 Distribution of LCC Savings for Gas-Fired Steam 

Boilers

Figure 8.4.4 shows the range of PBPs for all efficiency levels considered for gas-fired 

steam boilers.

-200

0

200

400

600

800

1000

1200

1400

1600

1800

Level 1 Level 2

Average LCC Savings 2013$

Efficiency Level

Gas-Fired Steam Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-43

Figure 8.4.4 Distributions of PBP for Gas-Fired Steam Boilers

The rebuttable PBP for each efficiency level is shown in Table 8.4.4.

Table 8.4.4 Rebuttable 

Payback 

Period for 

Gas-Fired 

Steam 

Boilers

EL Technology Option Rebuttable Payback Period years

1 82% AFUE - Increased HX Area 2.5

2 83% AFUE - Max Tech 4.8

0

5

10

15

20

25

30

35

40

45

50

Level 1 Level 2

Average Payback Period (years)

Efficiency Level

Gas-Fired Steam Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-44

8.4.3 Oil-Fired Hot Water Boilers

Table 8.4.5 summarizes the LCC and PBP results for oil-fired hot water boilers.

Table 8.4.5 Oil-Fired 

Hot Water 

Boilers: 

LCC and 

PBP Results

EL AFUE

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 84% $6,955 $46,013 $52,968 NA 0% 100% 0% NA

1 85% $7,249 $45,494 $52,743 $45 5% 82% 13% 8.4

2 86% $7,467 $44,982 $52,449 $197 11% 49% 40% 7.7

3 91% $9,039 $43,233 $52,272 $354 54% 8% 37% 21.7

Figure 8.4.5 shows the range of LCC savings for the efficiency levels considered for oilfired hot water boilers. For each standard level, the top and the bottom of the box indicate the 

75th and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 50 

percent of the households have life-cycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level. 
8-45

Figure 8.4.5 Distribution of LCC Savings for Oil-Fired Hot 

Water Boilers

Figure 8.4.6 shows the range of PBPs for all efficiency levels considered for oil-fired hot 

water boilers.

-3000

-2000

-1000

0

1000

2000

3000

4000

5000

6000

Level 1 Level 2 Level 3

Average LCC Savings 2013$

Efficiency Level

Oil-Fired Hot Water Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-46

Figure 8.4.6 Distributions of PBP for Oil-Fired Hot Water 

Boilers

The rebuttable PBP for each efficiency level is shown in Table 8.4.6.

Table 8.4.6 Rebuttable 

Payback 

Period for 

Oil-Fired 

Hot Water 

Boilers

EL Technology Option Rebuttable Payback Period years

1 85% AFUE - Increased HX Area 9.8

2 86% AFUE - Increased HX Area 6.9

3 91% AFUE - Condensing (Max Tech) 8.0

0

10

20

30

40

50

60

70

80

90

100

Level 1 Level 2 Level 3

Average Payback Period (years)

Efficiency Level

Oil-Fired Hot Water Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-47

8.4.4 Oil-Fired Steam Boilers

Table 8.4.7 summarizes the LCC and PBP results for oil-fired steam boilers. 

Table 8.4.7 Oil-Fired 

Steam 

Boilers: 

LCC and 

PBP Results

EL AFUE

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 82% $6,952 $45,571 $52,523 NA 0% 100% 0% NA

1 84% $7,233 $44,545 $51,779 $223 4% 72% 24% 6.6

2 85% $7,354 $44,045 $51,398 $465 7% 37% 57% 5.5

3 86% $7,536 $43,566 $51,103 $731 17% 10% 73% 7.9

Figure 8.4.7 show the range of LCC savings for the efficiency levels considered for oilfired steam boilers. For each standard level, the top and the bottom of the box indicate the 75th

and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 50 

percent of the households have life-cycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level. 
8-48

Figure 8.4.7 Distribution of LCC Savings for Oil-Fired Steam 

Boilers

Figure 8.4.8 shows the range of PBPs for all efficiency levels considered for oil-fired 

steam boilers.

-500

0

500

1000

1500

2000

2500

3000

3500

Level 1 Level 2 Level 3

Average LCC Savings 2013$

Efficiency Level

Oil-Fired Steam Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-49

Figure 8.4.8 Distributions of PBP for Oil-Fired Steam Boilers

The rebuttable PBP for each efficiency level is shown in Table 8.4.8.

Table 8.4.8 Rebuttable 

Payback 

Period for 

Oil-Fired 

Steam 

Boilers

EL Technology Option Rebuttable Payback Period years

1 84% AFUE - Increased HX Area 3.2

2 85% AFUE - Increased HX Area 3.5

3 86% AFUE - Max Tech 3.7

0

5

10

15

20

25

30

Level 1 Level 2 Level 3

Average Payback Period (years)

Efficiency Level

Oil-Fired Steam Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-50

8.4.5 Standby Power Results

8.4.5.1 Gas-Fired Hot Water Boilers

Table 8.4.9 shows the standby power LCC and PBP results for gas-fired hot water 

boilers. 

Table 8.4.9 Gas-Fired 

Hot Water 

Boilers: 

Standby 

Power LCC 

and PBP 

Results

EL

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Incremental 

Retail Price

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 $0 $339 $339 NA 0% 100% 0% NA

1 $2 $304 $307 $32 0% 0% 100% 1.1

2 $22 $298 $320 $19 24% 0% 76% 10.4

3 $24 $282 $305 $33 11% 0% 89% 7.5

Figure 8.4.9 show the range of LCC savings for the efficiency levels considered for gasfired hot water boilers. For each standard level, the top and the bottom of the box indicate the 

75th and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 50 

percent of the households have life-cycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level.
8-51

Figure 8.4.9 Distribution of LCC Savings for Gas-Fired Hot 

Water Boilers (Standby)

Figure 8.4.10 shows the range of PBPs for all efficiency levels considered for gas-fired 

hot water boilers.

-20

0

20

40

60

80

100

120

Level 1 Level 2 Level 3

Average Payback Period (years)

Efficiency Level

Gas-Fired Hot Water Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-52

Figure 8.4.10 Distributions of PBP for Gas-Fired Hot Water 

Boilers (Standby)

The rebuttable PBP for each efficiency level is shown in Table 8.4.10.

Table 8.4.10 Rebuttable 

Payback 

Period for 

Gas-Fired 

Hot Water 

Boilers

(Standby)

EL Technology Option Rebuttable Payback Period years

1 Linear PS, Toroidal Xfmr 1.5

2 Switch Mode PS 13.0

3 SMPS, Toroidal Xfmr 9.9

0

5

10

15

20

25

Level 1 Level 2 Level 3

Average Payback Period (years)

Efficiency Level

Gas-Fired Hot Water Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-53

8.4.5.2 Gas-Fired Steam Boilers

Table 8.4.11 shows the standby power LCC and PBP results for gas-fired steam boilers. 

Table 8.4.11 Gas-Fired 

Hot Water 

Boilers: 

Standby 

Power LCC 

and PBP 

Results

EL

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Incremental 

Retail Price

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 $0 $331 $331 NA 0% 100% 0% NA

1 $2 $297 $300 $31 0% 0% 100% 1.0

2 $21 $291 $312 $18 22% 0% 78% 10.3

3 $23 $275 $298 $32 9% 0% 91% 7.4

Figure 8.4.11 shows the range of LCC savings for the efficiency levels considered for 

gas-fired steam boilers. For each standard level, the top and the bottom of the box indicate the 

75th and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 50 

percent of the households have life-cycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level. 
8-54

Figure 8.4.11 Distribution of LCC Savings for Gas-Fired Steam 

Boilers (Standby)

Figure 8.4.12 shows the range of PBPs for all efficiency levels considered for gas-fired 

steam boilers.

-20

0

20

40

60

80

100

120

Level 4 Level 5 Level 6

Average Payback Period (years)

Efficiency Level

Gas-Fired Steam Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-55

Figure 8.4.12 Distributions of PBP for Gas-Fired Steam Boilers

(Standby)

The rebuttable PBP for each efficiency level is shown in Table 8.4.12.

Table 8.4.12 Rebutt

able 

Payback 

Period for 

Gas-Fired 

Steam 

Boilers

(Standby)

EL Technology Option Rebuttable Payback Period years

1 Linear PS, Toroidal Xfmr 1.5

2 Switch Mode PS 13.0

3 SMPS, Toroidal Xfmr 10.0

0

2

4

6

8

10

12

14

Level 4 Level 5 Level 6

Average Payback Period (years)

Efficiency Level

Gas-Fired Steam Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-56

8.4.5.3 Oil-Fired Hot Water Boilers

Table 8.4.13 shows the standby power LCC and PBP results for oil-fired hot water 

boilers.

Table 8.4.13 Oil-Fired 

Hot Water 

Boilers: 

Standby 

LCC and 

PBP Results

EL

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Retail 

Price

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 $0 $364 $364 NA 0% 100% 0% NA

1 $2 $328 $330 $34 0% 0% 100% 1.0

2 $21 $321 $342 $22 18% 0% 82% 10.2

3 $22 $305 $327 $37 7% 0% 93% 7.2

Figure 8.4.13 shows the range of LCC savings for the efficiency levels considered for oilfired hot water boilers. For each standard level, the top and the bottom of the box indicate the 

75th and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 50 

percent of the households have life-cycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level. 
8-57

Figure 8.4.13 Distribution of LCC Savings for Oil-Fired Hot 

Water Boilers (Standby)

Figure 8.4.14 shows the range of PBPs for all efficiency levels considered for oil-fired 

hot water boilers.

-20

0

20

40

60

80

100

120

Level 1 Level 2 Level 1

Average Payback Period (years)

Efficiency Level

Oil-Fired Hot Water Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-58

Figure 8.4.14 Distributions of PBP for Oil-Fired Hot Water 

Boilers (Standby)

The rebuttable PBP for each efficiency level is shown in Table 8.4.14.

Table 8.4.14 Rebuttable 

Payback 

Period for 

Oil-Fired 

Hot Water 

Boilers

(Standby)

EL Technology Option Rebuttable Payback Period years

1 Linear PS, Toroidal Xfmr 1.5

2 Switch Mode PS 12.7

3 SMPS, Toroidal Xfmr 9.7

0

2

4

6

8

10

12

Level 1 Level 2 Level 1

Average Payback Period (years)

Efficiency Level

Oil-Fired Hot Water Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-59

8.4.5.4 Oil-Fired Steam Boilers

Table 8.4.15 shows the standby power LCC and PBP results for oil-fired steam boilers. 

Table 8.4.15 Oil-Fired 

Steam 

Boilers: 

LCC and 

PBP Results

EL

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Retail 

Price

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 $0 $360 $360 NA 0% 100% 0% NA

1 $2 $324 $326 $34 0% 0% 100% 1.0

2 $21 $317 $338 $22 18% 0% 82% 10.2

3 $22 $300 $323 $37 7% 0% 93% 7.2

Figure 8.4.15 show the range of LCC savings for the efficiency levels considered for oilfired steam boilers. For each standard level, the top and the bottom of the box indicate the 75th

and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 50 

percent of the households have life-cycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level. 
8-60

Figure 8.4.15 Distribution of LCC Savings for Oil-Fired Steam 

Boilers (Standby)

Figure 8.4.16 shows the range of PBPs for all efficiency levels considered for oil-fired

steam boilers.

-20

0

20

40

60

80

100

120

Level 2 Level 3 Level 1

Average Payback Period (years)

Efficiency Level

Oil-Fired Steam Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-61

Figure 8.4.16 Distributions of PBP for Oil-Fired Steam Boilers

(Standby)

The rebuttable PBP for each efficiency level is shown in Table 8.4.16.

Table 8.4.16 Rebuttable 

Payback 

Period for 

Oil-Fired 

Hot Water 

Boilers

(Standby)

EL Technology Option Rebuttable Payback Period years

1 Linear PS, Toroidal Xfmr 1.5

2 Switch Mode PS 13.0

3 SMPS, Toroidal Xfmr 9.9

0

2

4

6

8

10

12

Level 2 Level 3 Level 1

Average Payback Period (years)

Efficiency Level

Oil-Fired Steam Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-62

8.4.5.5 Electric Hot Water Boilers

Table 8.4.17 shows the standby power LCC and PBP results for electric hot water boilers. 

Table 8.4.17 Electric Hot 

Water 

Boilers: 

Standby 

LCC and 

PBP Results

EL

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Retail 

Price

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 $0 $211 $211 NA 0% 100% 0% NA

1 $2 $185 $187 $24 0% 0% 100% 2.0

2 $22 $180 $202 $9 38% 0% 62% 11.1

3 $23 $168 $191 $20 21% 0% 79% 10.9

Figure 8.4.17 show the range of LCC savings for the standby efficiency levels considered 

for electric hot water boilers. For each standard level, the top and the bottom of the box indicate 

the 75th and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 

50 percent of the households have life-cycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level. 
8-63

Figure 8.4.17 Distribution of LCC Savings for Electric Hot Water 

Boilers (Standby)

Figure 8.4.18 shows the range of PBPs for all efficiency levels considered for electric hot 

water boilers.

-20

-10

0

10

20

30

40

50

60

70

80

Level 2 Level 3

Average Payback Period (years)

Efficiency Level

Electric Hot Water Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-64

Figure 8.4.18 Distributions of PBP for Electric Hot Water Boilers

(Standby)

The rebuttable PBP for each efficiency level is shown in Table 8.4.18.

Table 8.4.18 Rebutt

able 

Payback 

Period for 

Electric Hot 

Water

Boilers

(Standby)

EL Technology Option Rebuttable Payback Period years

1 Linear PS, Toroidal Xfmr 1.3

2 Switch Mode PS 11.6

3 SMPS, Toroidal Xfmr 8.9

0

5

10

15

20

25

Level 2 Level 3

Average Payback Period (years)

Efficiency Level

Electric Hot Water Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-65

8.4.5.6 Electric Steam Boilers

Table 8.4.19 shows the standby power LCC and PBP results for electric steam boilers. 

Table 8.4.19 Electric

Steam

Boilers: 

Standby 

LCC and 

PBP Results

EL

Life-Cycle Cost (2013$) Life-Cycle Cost Savings Median 

Payback 

Period 

(years)

Average 

Retail 

Price

Average 

Lifetime 

Operating 

Cost

Average 

LCC

Average 

Savings 

(2013$)

% Households with

Net

Cost

No 

Impact

Net 

Benefit

0 $0 $211 $211 NA 0% 100% 0% NA

1 $2 $185 $187 $24 0% 0% 100% 2.0

2 $22 $180 $202 $9 38% 0% 62% 11.1

3 $23 $168 $191 $20 21% 0% 79% 10.9

Figure 8.4.19 show the range of LCC savings for the standby efficiency levels considered 

for electric steam boilers. For each standard level, the top and the bottom of the box indicate the 

75th and 25th percentiles, respectively. The bar at the middle of the box indicates the median; 50 

percent of the households have life-cycle cost savings above this value. The “whiskers” at the 

bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each standard level. 
8-66

Figure 8.4.19 Distribution of LCC Savings for Electric Steam 

Boilers (Standby)

Figure 8.4.20 shows the range of PBPs for all efficiency levels considered for electric 

steam boilers.

-20

-10

0

10

20

30

40

50

60

70

80

Level 2 Level 3

Average Payback Period (years)

Efficiency Level

Electric Steam Boilers (National) Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-67

Figure 8.4.20 Distributions of PBP for Electric Steam Boilers 

(Standby)

The rebuttable PBP for each efficiency level is shown in Table 8.4.20.

Table 8.4.20 Rebutt

able 

Payback 

Period for 

Electric

Steam

Boilers 

(Standby)

EL Technology Option Rebuttable Payback Period years

1 Linear PS, Toroidal Xfmr 1.3

2 Switch Mode PS 11.6

3 SMPS, Toroidal Xfmr 8.9

0

5

10

15

20

25

Level 2 Level 3

Average Payback Period (years)

Efficiency Level

Electric Steam Boilers (National) Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95% 

median

average
8-68

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